---

---

|                                                
|------------------------------------------------
|UNITED STATES SECURITIES AND EXCHANGE COMMISSION
|Washington, D.C. 20549                          
|                                                
|Form 10-K/A                                     
|                                                
|(Amendment No. 2)                               

|  |                                                      
|- | -----------------------------------------------------
|x | ANNUAL
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF    
|  | THE
 SECURITIES EXCHANGE ACT OF 1934                 
|  | For the
 Fiscal Year Ended December 31, 2009         
|  |                                                      
|  | OR                                                   
|  |                                                      
|o | TRANSITION
 REPORT PURSUANT TO SECTION 13 OR 15(d) OF
|  | THE
 SECURITIES EXCHANGE ACT OF 1934                 
|  | For the
 transition period from _______ to _______   

Commission file number: 0-12957

(ENZON PHARMACEUTICAL INC. LOGO)

(Exact name of registrant as specified in its charter)

|                                                                    |                                     
|------------------------------------------------------------------- | ------------------------------------
|Delaware                                                            | 22-2372868                          
|(State or other jurisdiction of incorporation or
 organization)     | (I.R.S. Employer Identification No.)
|685 Route 202/206, Bridgewater, New Jersey                          | 08807                               
|(Address of principal executive offices)                            | (Zip Code)                          
|                                                                    |                                     
|Registrants telephone number, including area code: (908)
 541-8600
|Securities registered pursuant to Section 12(b) of the Act:        
|                                                                    |                                     
|Title of Class                                                      | Name of Exchange on Which Registered
|                                                                    |                                     
|Common
 Stock, $0.01 par value;                                     | NASDAQ
 Global Market               
|Preferred
 Stock Purchase Rights                                    |                                     

Securities registered pursuant to Section 12(g) of the
Act: None

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. o Yes
x No

Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange Act. o Yes x
No

Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the
past 90 days. x Yes o No

Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files). o Yes o No

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. x

Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of large accelerated filer, accelerated filer and smaller
reporting company in Rule 12b-2 of the Exchange Act. (Check One):

|oLarge accelerated filer | xAccelerated filer | oNon-accelerated filer | oSmaller reporting company
|------------------------ | ------------------ | ---------------------- | --------------------------

Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). o Yes x No

The
aggregate market value of the Common Stock, par value $.01 per share (Common
Stock), held by non-affiliates of the registrant was approximately
$351,128,000 as of June 30, 2009, based upon the closing sale price on the
NASDAQ Global Market of $7.91 reported for such date. Shares of Common Stock
held by each officer and director and by each person who owns 10% or more of
the outstanding shares of Common Stock have been excluded in that such shares
may be deemed to be owned by affiliates. This determination of affiliate status
is not necessarily a conclusive determination for other purposes.

There
were 60,279,416 shares of the registrants common stock issued and outstanding
as of June 7, 2010.

DOCUMENTS INCORPORATED BY REFERENCE

None.

---

---



Explanatory Statement

Why we are filing this Amendment to our Form 10-K

On
April 15, 2010, we filed Amendment No. 1 (the Initial Amendment) to our
Annual Report on Form 10-K for the period ended December 31, 2009, which was
originally filed on March 12, 2010 (as amended, the 10-K Report), for the
sole purpose of including Part III, Items 10 through 14 thereto. We are filing
this Amendment No. 2 on Form 10-K/A (the Amended Report) to the 10-K Report
for the sole purpose of correcting certain information appearing in Part III,
Item 11.

Subsequent
to filing and mailing our 2010 Proxy Statement, we recently became aware of an
inadvertent error in the Director Compensation Table, appearing on page 10 of
our 2010 Proxy Statement and page 26 of the Initial Amendment, and the Summary
Compensation Table, appearing on pages 28 and 29 of the 2010 Proxy Statement
and page 20 of the Initial Amendment (collectively, the Compensation Tables).
The Stock Awards and Option Awards columns of each of the Compensation
Tables provide the dollar amount recognized for financial statement accounting
purposes, as was required under Items 402(c)(2)(v) and 402(c)(2)(vi) of
Regulation S-K, as these rules were in effect for our Proxy Statement in
connection with our 2009 Annual Meeting of Stockholders. This Amended Report is
being filed in order to amend and restate both of the Compensation Tables, in
each case, to provide the grant date fair value information for the Stock
Awards and Option Awards granted during the fiscal year ended December 31, 2009
(and, with respect to the Summary Compensation Table, the fiscal years ended
December 31, 2008 and December 31, 2007), as required under Items 402(c)(2)(v)
and 402(c)(2)(vi) as currently in effect. No changes have been made in the
footnotes to the Compensation Tables.

Pursuant
to Rule 12b-15 under the Securities Exchange Act of 1934, as amended, each item
of the 10-K Report that is amended by this Amended Report is also restated in
its entirety, and this Amended Report is accompanied by an updated consent on
Exhibit 23.0 from our independent registered public accounting firm and
currently dated certifications on Exhibit 31.1 by the Companys Principal
Executive Officer and Exhibit 31.2 by the Companys Principal Financial
Officer. This Amended Report amends the 10-K Report to (i) revise Part III, Item
11 as described above and (ii) revise the Exhibit Index to reflect the filing
of the updated consent and the new certifications.

Except
as described above, no other changes have been made to the 10-K Report. This
Amended Report should be read in conjunction with the 10-K Report and our other
reports filed with the Securities and Exchange Commission (the SEC)
    subsequent to the filing of the 10-K Report, including any amendments to
    those filings. In addition, our 2010 Proxy Statement filed with the SEC on
    Schedule 14A on June 10, 2010 contains certain more current information regarding
    executive compensation.

---



ENZON PHARMACEUTICALS, INC.

2009 Form 10-K/AAmendment No. 2 to Annual Report

TABLE OF CONTENTS

PART III


|         |                        |  
|-------- | ---------------------- | -
|Item 11. | Executive Compensation | 1

PART IV


|         |                                             |   
|-------- | ------------------------------------------- | --
|Item 15. | Exhibits and Financial
 Statement Schedules | 21



---



PART III

|                                | 
|------------------------------- | 
|Item 11. Executive Compensation

COMPENSATION DISCUSSION AND ANALYSIS

The
Compensation Committee determines all compensation paid or awarded to our
executive officers, including the Named Executive Officers (as defined below
under Historical Compensation of our Executive Officers). The following
discussion describes the objectives of our compensation programs, including the
philosophy and policies behind the programs, the elements of our compensation
programs, and the impact of regulatory requirements on our compensation
decisions and programs.

Objectives
of Our Compensation Program

Compensation
Philosophy and Policies

The
philosophy of our compensation programs is to enhance the Companys performance
and stockholder value by aligning the financial interests of our senior
managers with those of our stockholders, while keeping the overall compensation
package competitive. The compensation package for officers includes a number of
components. The combination of base salary, annual incentives and long-term
incentives that we provide to our executives is designed to be competitive with
those of comparable companies and to align executive performance with the
interests of our stockholders. The package is designed to align individual
compensation with the short-term and long-term performance of the Company and
is based on the following principles:

| |   |                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Pay
 for the achievement of business and strategic objectives, as measured by our
 financial and operating performance, as well as individual strategic,
 management and development goals.
| |   |                                                                                                                                                                                            
| |  | Pay
 competitively, with compensation set at levels that will attract and retain
 key employees.                                                                                           
| |   |                                                                                                                                                                                            
| |  | Align
 the compensation of executive officers with the interests of stockholders
 through equity.                                                                                          

The
Compensation Committee focuses on the long-term strategic objectives of the
Company and the need to retain unique talent to achieve those objectives. In
addition to reviewing the competitive landscape of the biopharmaceutical
industry, the Compensation Committee carefully considers, through strategic
analysis, the specific long term needs of the Company to grow stockholder
value. Along those lines, the Compensation Committee continues to monitor its
compensation philosophy and objectives and will make changes as appropriate to
better position the Company for the future.

Compensation
Consultant; Compensation Peer Group

Mercer
(US) Inc. (Mercer), the outside compensation expert retained by the
Compensation Committee, assists the Compensation Committee with determinations
concerning compensation levels and mix for our executive officer group. As part
of its engagement, Mercer analyzes data from the group of biopharmaceutical
industry companies of comparable revenues, therapeutic focus and business
model, including a selected subset of companies that are included in the Nasdaq
Biotechnology Index. This group, which we will refer to as the Compensation
Peer Group in this Compensation Discussion and Analysis, is intended to
represent a group of companies against which we believe we compete for talent
and stockholder investment. The Compensation Peer Group is periodically
reviewed and updated by the Compensation Committee. Additionally, Mercer has
reviewed and concurred with the selection of companies included in the
Compensation Peer Group. The Compensation Peer Group currently consists of the
following companies: Alkermes, Inc., Celgene Corporation, Cephalon, Inc., Genta
Incorporated, Human Genome Sciences, Inc., Ligand Pharmaceuticals Incorporated,
Medarex, Inc., Nektar Therapeutics, Neurocrine Biosciences, Inc., OSI Pharmaceuticals,
Inc., PDL BioPharma, Inc., Sepracor Inc., Telik, Inc. and Vertex
Pharmaceuticals Incorporated. For comparison purposes, the Companys annual
revenues ranked between the 50th and 60th percentile of companies comprising
the Compensation Peer Group (based on 2008 revenues). The committee generally
sets target compensation for the Companys executive officers between the 50th
and 75th percentiles of compensation paid to similarly situated executives of
the companies comprising the Compensation Peer Group. The Committee believes
that the range between the 50th and 75th percentiles provides competitive
overall compensation targets to attract and retain experienced executive
talent, drive their performance and reward the achievement of challenging goals.

          With the recent sale of the Companys specialty pharmaceutical business in
January 2010 to affiliates of the Sigma-Tau group (Sigma-Tau) and the
reorganization of the Company around a biotechnology business

1

---



model,
the Compensation Peer Group is being reevaluated for a more appropriate mix of
companies related to market capitalization, platform technologies and pipeline
status.

Components
of the Compensation Package

The
compensation package for each of the Named Executive Officers as well as other
officers who are members of our executive staff consists of four elements:

| |   |                                     
| | - | ------------------------------------
| |  | base salary;                        
| |   |                                     
| |  | annual performance-based
 incentive;
| |   |                                     
| |  | stock incentive programs;
 and      
| |   |                                     
| |  | various other benefits.             

In
addition, our executive officers may have entered into employment agreements
with us, and may be entitled to receive change of control and severance
payments, or to participate in our executive deferred compensation plan. More
specific information on each of these elements follows.

There
is no pre-established policy or target, except where specified in an employment
agreement, for the allocation between either cash or non-cash or short-term and
long-term incentive compensation. Rather, the Compensation Committee
determines, and at its discretion, in consultation with Mercer, the appropriate
level and mix of incentive compensation.

The
elements of the compensation package are determined and allocated with
consideration of comparisons to the Compensation Peer Group. Each element of
the compensation package and the allocation of such elements are proposed by
management and reviewed and approved by the Compensation Committee, and, at the
discretion of the Compensation Committee, in consultation with Mercer.

Base
Salary

The
Compensation Committee aims to set base salaries at levels that are competitive
with those paid to senior executives at companies included in the Compensation
Peer Group. The Compensation Committee believes that this will allow the
Company to attract and retain the executive talent required to lead the
Company, since we compete with a large number of companies in the
biopharmaceutical industry, including large pharmaceutical companies, for
executive talent. Salaries are reviewed annually and in connection with
promotions. The Compensation Peer Group is considered in making salary
determinations to align our pay practices with other companies in the
pharmaceutical and biotechnology industries. Individual job performance is also
considered in setting salaries. During 2009, our Chief Executive Officer
conducted performance reviews of members of executive management and made
recommendations to the Compensation Committee on salary, including salary
increases, based on his judgment of the individuals performance, using the
following criteria for evaluation: attainment of job accountabilities and
functional goals, leadership qualities, strategic contribution and adoption of
the Companys corporate values that focus on five key operating
principlespeople, passion, performance, pride, and a steadfast commitment to
delivering on promises. The Compensation Committee reviewed these
recommendations independently and approved the annual salary and salary
increases, with any modifications it considered appropriate based on its own
interaction with executive management and review of accomplishments. See the
discussion in the Corporate Governance section above regarding the Compensation
Committee for additional disclosure concerning our Chief Executive Officers
role in compensation decisions.

The
Compensation Committee reviewed base salaries at the end of the fiscal years
ended December 31, 2008 and 2009 and determined not to increase any executive
officer salaries for 2009 or 2010. This determination was based on Compensation
Peer Group market data reviewed by Mercer and the determination that current
base salary levels remained competitive. For additional information regarding
the base salaries in fiscal year 2009, see the Summary Compensation Table
below. The base salaries for the Named Executive Officers, effective January 1,
2010, are as set forth below (other than for Mr. Buchalter, who resigned from
the Company effective February 22, 2010). The titles for each Named Executive
Officer are as of January 1, 2010.

2

---



|                                                                                                      |  |                   |         |                      |  |                                         |  |   |         | 
|----------------------------------------------------------------------------------------------------- |  | ----------------- | ------- | -------------------- |  | --------------------------------------- |  | - | ------- | 
|                                                                                                      |  |                   |         |                      |  |                                         |  |   |         | 
|                                                                                                      |  |                   |         |                      |  |                                         |  |   |         | 
|Name and
 Title of Executive Officer                                                                  |  | 2009
 Base Salary |         | Salary
 Increase (%) |  | Base Salary
 effective
 January 1, 2010 | 
|                                                                                                      |  |                   |         |                      |  |                                         | 
|Craig A. Tooman, Executive Vice President, Finance and Chief Financial
 Officer                       |  | $                 | 505,000 |                      |  | 0%                                      |  | $ | 505,000 | 
|Ivan D. Horak, M.D., Executive Vice President, Research and
 Development and Chief Scientific Officer |  | $                 | 533,663 |                      |  | 0%                                      |  | $ | 533,663 | 
|Ralph del Campo, Executive Vice President, Technical Operations                                       |  | $                 | 412,886 |                      |  | 0%                                      |  | $ | 412,886 | 
|Paul S. Davit, Executive Vice President, Human Resources                                              |  | $                 | 349,830 |                      |  | 0%                                      |  | $ | 349,830 | 

Annual
Performance-Based Incentive Compensation

The
Company maintains an incentive program that provides an opportunity for
officers and employees to earn a cash incentive based upon the Companys
performance and their individual performance. The incentive potential is stated
as a percentage of the officers or employees base salary and varies by
position, and for those officers with employment agreements will be at least
equal to the percentage required by such employment agreements. Corporate goals
are discussed and agreed to by the Board of Directors prior to the beginning of
a new fiscal year. Individual goals for employees and Named Executive Officers
are established in alignment with these overall corporate goals. In addition,
the Named Executive Officers have specific functional goals set at the start of
the fiscal year and based on business criteria. Actual incentives are
calculated at the end of the fiscal year based on goal performance and overall
corporate performance.

All
executive management had the same corporate goals for the period covered by
this report. The corporate goals were based on annual product revenues,
operational project milestones and pipeline development. These targets were
developed to be consistent with, and promote the achievement of, the objectives
of the Companys long-term strategic plan and the Companys focus on developing
a platform for long-term sustainable growth. Achievement of these goals is part
of the total consideration for managements cash incentive for 2009. The 2009
stated corporate goals included maintaining relative stability of revenues in
the products and contract manufacturing segments, advancing two R&D
programs into further clinical trials, advancing our next-generation Oncaspar
and Adagen programs, continued improvement in the Companys capital structure,
continued improvement in gross margins, identification of additional G&A
efficiencies. Beyond the specific 2009 corporate goals, the Company has ongoing
strategic goals that are in-line with the long-term strategic plan, including
identification of value-enhancing opportunities. In 2009, the Company had a 3%
increase in product segment revenues. The Companys pegylated SN38 product
candidate progressed through Phase I studies and advanced into Phase II. In
2009, the Company filed an Investigational New Drug application for its
next-generation Adagen program. The Company was also successful in transferring
the improved manufacturing technology for its next-generation Oncaspar and
Adagen and the pivotal clinical study for Oncaspar is well underway. The
Company improved its capital structure with the purchase of $20.5 million of
its outstanding convertible debt in 2009. The Company also made improvements in
its financials by the improvement in its gross margin due to the consolidation
of its manufacturing facilities and efficiencies in its overall expense
structure primarily in general and administrative.

Individual
goals and weightings for each participant varied, depending on the
participants position and areas of responsibility and the participants effect
on the Companys performance. As with base salary, the evaluation considered
the individuals performance using the following criteria for evaluation:
attainment of job accountabilities and functional goals, leadership qualities,
strategic contribution and adoption of the Companys key operating principles.
Targets were developed with the expectation that their achievement would be
attainable but ambitious. Thus, there is meaningful risk that targets will not
be achieved and payments will not be made at all or will be made at less than
100%. This uncertainty ensures that any payments under this program are truly
performance-based. Achievement of the individual goals is reviewed in
consideration of managements cash incentive for 2009.

3

---



The 2009
individual performance goals for the Named Executive Officers were as follows:

|                                                                                                     |  |                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |  |  |  |                    | 
|---------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  |  | ------------------ | 
|Name
 and Title of Executive Officer                                                                 |  |                                                                                                                                                                                                                                             |  | 2009
 Performance Goals                                                                                                                                                                                                                                                                                                                                                                                                                       |  |  |  |  | 2009
 Achievements | 
|                                                                                                     |  |                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |  |  |  |                    | 
|                                                                                                     |  |                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | 
|Jeffrey H. Buchalter
 President and Chief Executive
 Officer                                         |  |       Achievement of 2009 corporate goals
       Achievement of strategic goals
       Achievement of individual functional
 goals by the other Executive Officers as specified below in this table                                      |  |       Sale of specialty pharmaceutical
 business
       Commencement of two Phase II studies
 for PEG-SN38 and Phase I study for Survivin Antagonist
       Delay in completion of next- generation
 Oncaspar pivotal study and delay in commencement of HIF-1 alpha Antagonist
 Phase II study                                                                                                                                           
|                                                                                                     |  |                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | 
|Craig A. Tooman
 Executive Vice President,
 Finance and Chief Financial Officer                      |  |       Continue to improve capital structure
       Lead team to identify additional
 G&A efficiencies
       Maintain good financial controls
       Successfully implement new ERP system                                              |  |       Repurchase of $20.5 million in
 convertible notes at discount to par
       Decrease in G&A expenses by $2.7
 million or 7% from 2008
       Maintained good financial controls
       Successfully implemented new ERP system
 on budget                                                                                                                                                                                          
|                                                                                                     |  |                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | 
|Ivan D. Horak, M.D.
 Executive Vice President,
 Research and Developmentand Chief Scientific Officer |  |       Advance two clinical programs into
 Phase II studies
       Execution of Survivin Phase I study
       File IND for next-generation Adagen
 program
       Identify an additional preclinical
 candidate for IND enabling studies |  |       Commencement of two Phase II studies
 for PEG-SN38 and Phase I study for Survivin Antagonist
       Delay in completion of next- generation
 Oncaspar pivotal study and delay in commencement of HIF-1 alpha Antagonist
 Phase II study
       Filed IND for next-generation Adagen
 program
       Identified next LNA compound for IND
 enabling studies                                                                         
|                                                                                                     |  |                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | 
|Ralph del Campo
 Executive Vice President,
 Technical Operations                                     |  |       Maintain good compliance profile at
 Indianapolis facility
       Continued improvement in cost of goods
       Maintain CMO revenues                                                                                              |  |       Successful regulatory inspections and
 overall compliance record at Indianapolis facility
       Significant reduction in COGS through
 consolidation and yield improvements
       CMO revenues decreased from loss of
 significant customer                                                                                                                                                                                       
|                                                                                                     |  |                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | 
|Paul S. Davit
 Executive Vice President,
 Human Resources                                            |  |       Improve HR efficiencies and
 effectiveness
       Improve employee engagement
       Management continuity planning
       Career development                                                                                     |  |       Lowered healthcare costs for
 significant savings to company without reducing employee benefits
       Improved organizational efficiencies
 through headcount reduction
       Facilitated reorganization of sales,
 marketing and medical affairs teams to increase operational efficiencies
       Implemented on-line training curriculum
 for technical operations
       Refined field sales performance
 management process

For 2009,
our Chief Executive Officer reviewed the performance goal achievement of
members of executive management and made recommendations to the Compensation
Committee on annual incentive payouts based on attainment of the agreed upon
goals. The Compensation Committee reviewed those recommendations and, with any
modifications it considered appropriate, determined and approved the annual

4

---



incentive payouts. The Compensation Committee independently reviewed
and recommended the annual incentive payout and compensation for the Chief
Executive Officer to the entire Board of Directors for approval.

The
Compensation Committee calculated performance incentives following the fiscal
year ended December 31, 2009, and the Company paid those performance incentives
as set forth below in January 2010, provided that one-half of the performance
incentives were paid in the form of restricted stock units having a one year
vesting period.

|                              |                                       |  |  |                                            |   |                                           |  |                               |       |                                                     |  |                                 |  |                                                      |  |  |  |  |      |   |  |  |  |         |  |  |  |  |      |   |  |  | 
|----------------------------- | ------------------------------------- |  |  | ------------------------------------------ | - | ----------------------------------------- |  | ----------------------------- | ----- | --------------------------------------------------- |  | ------------------------------- |  | ---------------------------------------------------- |  |  |  |  | ---- | - |  |  |  | ------- |  |  |  |  | ---- | - |  |  | 
|                              | Name
 and Title of
 Executive Officer |  |  | Target
 Cash
 Bonus (as %
 of base salary) |   | Cash
 Bonus
 Range (as %
 of base salary) |  | Actual
 Cash
 Bonus Award ($) |       | Actual
 Cash
 Bonus Award
 (as a % of
 base salary) |  | Actual
 Equity
 Bonus Award ($) |  | Actual
 Total
 Bonus Award
 (as a % of
 base salary) | 
|                              |                                       |  |  |                                            |   |                                           |  |                               |       |                                                     |  |                                 |  |                                                      | 
|Jeffrey H.
 Buchalter         |                                       |  |  |                                            |   |                                           |  |                               |       |                                                     |  |                                 |  |                                                      |  |  |  |  |      |   |  |  |  |         |  |  |  |  |      |   | 
|President
 and Chief          |                                       |  |  |                                            |   |                                           |  |                               |       |                                                     |  |                                 |  |                                                      |  |  |  |  |      |   |  |  |  |         |  |  |  |  |      |   | 
|Executive
 Officer            |                                       |  |  | 100                                        | % |                                           |  |                               | 0-200 | %                                                   |  |                                 |  | 375,000                                              |  |  |  |  | 43.9 | % |  |  |  | 375,000 |  |  |  |  | 87.7 | % | 
|                             
|Craig A.
 Tooman              |                                       |  |  |                                            |   |                                           |  |                               |       |                                                     |  |                                 |  |                                                      |  |  |  |  |      |   |  |  |  |         |  |  |  |  |      |   | 
|Executive
 Vice President,    |                                       |  |  |                                            |   |                                           |  |                               |       |                                                     |  |                                 |  |                                                      |  |  |  |  |      |   |  |  |  |         |  |  |  |  |      |   | 
|Finance and
 Chief            |                                       |  |  |                                            |   |                                           |  |                               |       |                                                     |  |                                 |  |                                                      |  |  |  |  |      |   |  |  |  |         |  |  |  |  |      |   | 
|Financial
 Officer            |                                       |  |  | 60                                         | % |                                           |  |                               | 0-120 | %                                                   |  |                                 |  | 137,500                                              |  |  |  |  | 27.2 | % |  |  |  | 137,500 |  |  |  |  | 54.5 | % | 
|                             
|Ivan D.
 Horak, M.D.          |                                       |  |  |                                            |   |                                           |  |                               |       |                                                     |  |                                 |  |                                                      |  |  |  |  |      |   |  |  |  |         |  |  |  |  |      |   | 
|Executive
 Vice President,    |                                       |  |  |                                            |   |                                           |  |                               |       |                                                     |  |                                 |  |                                                      |  |  |  |  |      |   |  |  |  |         |  |  |  |  |      |   | 
|Research and
 Development     |                                       |  |  |                                            |   |                                           |  |                               |       |                                                     |  |                                 |  |                                                      |  |  |  |  |      |   |  |  |  |         |  |  |  |  |      |   | 
|and Chief
 Scientific Officer |                                       |  |  | 60                                         | % |                                           |  |                               | 0-120 | %                                                   |  |                                 |  | 162,500                                              |  |  |  |  | 30.5 | % |  |  |  | 162,500 |  |  |  |  | 60.9 | % | 
|                             
|Ralph del
 Campo              |                                       |  |  |                                            |   |                                           |  |                               |       |                                                     |  |                                 |  |                                                      |  |  |  |  |      |   |  |  |  |         |  |  |  |  |      |   | 
|Executive
 Vice President,    |                                       |  |  |                                            |   |                                           |  |                               |       |                                                     |  |                                 |  |                                                      |  |  |  |  |      |   |  |  |  |         |  |  |  |  |      |   | 
|Technical
 Operations         |                                       |  |  | 60                                         | % |                                           |  |                               | 0-100 | %                                                   |  |                                 |  | 125,000                                              |  |  |  |  | 30.3 | % |  |  |  | 125,000 |  |  |  |  | 60.6 | % | 
|                             
|Paul S.
 Davit                |                                       |  |  |                                            |   |                                           |  |                               |       |                                                     |  |                                 |  |                                                      |  |  |  |  |      |   |  |  |  |         |  |  |  |  |      |   | 
|Executive
 Vice President,    |                                       |  |  |                                            |   |                                           |  |                               |       |                                                     |  |                                 |  |                                                      |  |  |  |  |      |   |  |  |  |         |  |  |  |  |      |   | 
|Human
 Resources              |                                       |  |  | 50                                         | % |                                           |  |                               | 0-100 | %                                                   |  |                                 |  | 75,000                                               |  |  |  |  | 21.4 | % |  |  |  | 75,000  |  |  |  |  | 42.9 | % | 

| |                                                                                            |                                                                                                   
| | ------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------
| | For 2010,
 the Company goals upon which 2010 cash incentive awards will be based
 include:
| |                                                                                           
| |                                                                                           | achieving a
 key milestone in the Phase II clinical program for the Companys PEG-SN38;           
| |                                                                                            |                                                                                                   
| |                                                                                           | attaining
 proof of principle for the Company HIF-1 alpha and Survivin antagonists;               
| |                                                                                            |                                                                                                   
| |                                                                                           | filing an
 Investigational New Drug Application for the Company Androgen Receptor
 Antagonist;    
| |                                                                                            |                                                                                                   
| |                                                                                           | attain proof
 of principle for the PEGylation of a small molecule compound;                       
| |                                                                                            |                                                                                                   
| |                                                                                           | executing a
 value-added partnership or strategic alliance;                                       
| |                                                                                            |                                                                                                   
| |                                                                                           | execution of
 transition services to Sigma-Tau with respect to Oncaspar and Adagen
 programs;     
| |                                                                                            |                                                                                                   
| |                                                                                           | continued
 improvements in capital structure, financial controls, and G&A
 efficiencies;          
| |                                                                                            |                                                                                                   
| |                                                                                           | complete the
 evaluation of, and potential execution of, the sale of PEGINTRON royalties;         
| |                                                                                            |                                                                                                   
| |                                                                                           | restructuring
 for effective alignment and focus as a biotechnology organization; and             
| |                                                                                            |                                                                                                   
| |                                                                                           | develop a
 culture of inclusion, participatory work environment and rewards based on
 performance.

5

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The 2010
individual performance goals for the Named Executive Officers are as follows.
The titles for each Named Executive Officer are as of February 22, 2010:

|                                                                                 |                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |  |  |                         | 
|-------------------------------------------------------------------------------- | ------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  |  |  | ----------------------- | 
|                                                                                 | Name
 and Title of Executive Officer |                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |  |  | 2010
 Performance Goals | 
|                                                                                 |                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |  |  |                         | 
|                                                                                 |                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Ralph del
 Campo
 Chief Operating Officer                                        |                                      |       Achievement of 2010
 corporate goals
       Achievement of individual
 functional goals by the other Executive Officers as specified below in this
 table                                                                                                                                                                                                                                                                         
|                                                                                 |                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Craig A.
 Tooman
 Executive Vice President, Finance and Chief
 Financial Officer |                                      |       Complete the evaluation
 and potential sale of PEGINTRON royalty
       Continued improvements in
 capital structure
       Continue to maintain good
 financial controls
       Identify additional G&A
 efficiencies                                                                                                                                                                                                          
|                                                                                 |                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Ivan D.
 Horak, M.D.
 President of Research and Development                      |                                      |       Achieving a key
 milestone in the Phase II clinical program for the Companys PEG-SN38
       Attaining proof of principle for
 the Company HIF-1 alpha and Survivin antagonists
       Filing an Investigational New
 Drug Application for the Company Androgen Receptor Antagonist
       Attain proof of principle for
 the PEGylation of a small molecule compound
       Execution of publications and
 presentations plan
|                                                                                 |                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                            | 
|Paul S.
 Davit
 Executive Vice President, Human Resources                        |                                      |      Restructure for
 effective alignment and focus as a biotechnology organization
       Establish a culture of
 inclusion, participatory work environment and rewards based on performance
       Consolidate Research &
 Development personnel into Piscataway facility
       Maintain continued compliance
 with policies, regulations and Code of Conduct                                                                      

Stock
Incentive Programs

The
Compensation Committee believes that stock incentive programs directly link the
amounts earned by officers with the amount of appreciation realized by our
stockholders. Equity-based awards also serve as a critical retention incentive.
Stock incentive programs have always been viewed as a major means to attract
and retain highly qualified executives and key personnel and have always been a
major component of the compensation package, consistent with practices
throughout the pharmaceutical and biotechnology industries. Our stock incentive
programs are structured to encourage key employees to continue in our employ
and motivate performance that will meet the long-term expectations of
stockholders. In determining the size of any option or restricted stock or
restricted stock unit award, the Compensation Committee considers the
individuals position, past performance and potential, the desired retention
incentive, and market practices and levels.

The
Compensation Committee generally considers and makes grants of equity-based
awards to executive officers once a year coinciding with annual performance
reviews. Equity-based awards may also be granted at other times during the year
in connection with promotions or for new hires or as special performance
awards. Equity-based awards to members of executive management are made under
our 2001 Incentive Stock Plan. Options are granted with the exercise price
equal to the last reported sale price of our Common Stock on the date of grant
and expire ten years after the date of the grant. Vesting on most equity-based
awards occurs over a three to four year period, which is designed to encourage
retention. The amount and combination of equity grants, as well as the vesting
period, is determined by the Compensation Committee with the intention of
providing performance incentive and retention.

Other
Benefits

Executive
officers participate in the Companys Employee Stock Purchase Plan. The
Compensation Committee believes that all employees should have the opportunity
to acquire or increase their holdings of our

6

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Common Stock. Under our 2007 Employee Stock Purchase Plan, all eligible
employees, including executive officers, who choose to participate in the 2007
Employee Stock Purchase Plan have deductions made by us from their compensation
to purchase our Common Stock semi-annually on March 31 and September 30 of each
year, at a purchase price equal to 85% of the reported last sale price of our
Common Stock on either the first or last day of each six-month offering period,
whichever is less.

Executive
officers participate in the Companys 401(k) savings plan, a tax-qualified
defined contribution plan for the benefit of all of our employees, including
our executive officers. The 401(k) savings plan provides for a discretionary
matching contribution.

Executive
officers also participate in the Companys Executive Deferred Compensation Plan
that provides a select group of our management or highly compensated employees
with the opportunity to defer the receipt of certain compensation. The material
terms of this plan are described below under Executive Deferred Compensation
Plan.

Executive
officers participate in various medical, dental, life, disability and benefit
programs that are generally made available to all employees. Certain of our executive
officers also receive reimbursement for (1) tax and financial planning
services, (2) life and disability insurance premiums, and/or (3) home security
systems. It has been the Companys practice to make additional payments to
executive officers to make them whole with respect to taxes incurred in
connection with such reimbursements. However, in February 2009, the
Compensation Committee established a policy providing that the Company shall
not make any such additional payments to executive officers to make them whole
with respect to taxes incurred in connection with any perquisites.

The Company
maintains a limited membership in a chartered flight lease program. A chartered
flight can provide for more efficient and productive use of executives time as
compared to commercial flights. The Companys policy provided for independent
director review and approval of the business purpose for certain chartered
flights. The Companys policy also allowed family members to accompany our
executive officers on business flights, provided, that the value of family
member usage is reported according to Internal Revenue Service rules. The
Company terminated this program in 2010.

The Company
had maintained a leased automobile for use by executive officers. Additionally,
the Company had employed a security associate who also served as a driver for
executive officers primarily for the purpose of ensuring personal security.
These benefits were ended in 2009.

Executive
Officer Employment and Separation Agreements

Jeffrey
H. Buchalter

In December
2004, we entered into an employment agreement with Jeffrey H. Buchalter, the
Chairman of the Board of Directors, pursuant to which Mr. Buchalter served as
our Chairman, President and Chief Executive Officer.

The
agreement, as amended, provides for a base salary, which during 2009 was
$855,000 per year, subject to increase, and that Mr. Buchalter was eligible to
receive an annual performance-based cash bonus in an amount between zero and
200% of his base salary, based on individual and/or corporate factors
established and determined by the Board of Directors as described above under
Annual Performance-Based Incentive Compensation. The annual target bonus
required by Mr. Buchalters employment agreement was equal to 100% of his base
salary.

In the
event Mr. Buchalters employment is terminated without cause (as defined in Mr.
Buchalters employment agreement) or for good reason (as defined in Mr.
Buchalters employment agreement), Mr. Buchalter will be entitled to receive:
(i) a cash payment equal to any unpaid base salary through the date of
termination plus any earned bonus relating to the preceding fiscal year that
remains unpaid on the date of termination, (ii) a lump sum cash payment equal
to four times his annual base salary, and (iii) a pro rata portion of his
target bonus for the period worked during the fiscal year in which the
termination occurs. In addition, Mr. Buchalter will be entitled to
reimbursement for any health benefits and life and disability insurance
coverage available to him and his family members for a period of up to four
years commencing on the date of termination, all equity awards granted to Mr.
Buchalter that have not vested at the time of termination will vest immediately
upon termination, and Mr. Buchalter will continue to be entitled to any
deferred compensation and any other unpaid amounts and benefits earned and
vested prior to or as a result of his termination.

7

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Mr.
Buchalters employment agreement provides that (i) during the period ending
January 31, 2010, Mr. Buchalter will not be entitled to terminate his
employment for good reason by virtue of his having been removed from the
position of Chairman of the Board in July 2009 and (ii) during the period
commencing February 1, 2010 and ending on July 31, 2010, Mr. Buchalters right
to terminate his employment for good reason by virtue of his having been
removed as Chairman of the Board shall be reinstated. During the period described
in clause (ii) of the foregoing sentence, any resignation or termination of Mr.
Buchalters employment that is initiated by Mr. Buchalter will be deemed to be
a termination for good reason. Effective February 22, 2010, Mr. Buchalter
terminated his employment with the Company for good reason.

If any
payments or compensation received by Mr. Buchalter in connection with a change
of control are subject to an excise tax under Section 4999 of the Internal
Revenue Code, Mr. Buchalter will be entitled to receive additional payments to
make him whole with respect to such excise taxes.

Mr.
Buchalters employment agreement requires him to maintain the confidentiality
of proprietary information during the term of his agreement and thereafter. Mr.
Buchalter is subject to a non-competition covenant during the term of his
employment agreement and for two years after his employment is terminated (one
year if the termination occurs pursuant to a notice of nonrenewal).

The
agreement stipulates that the Company will reimburse Mr. Buchalter for (i) his
reasonable attorneys fees incurred in connection with any dispute arising from
the employment agreement in which Mr. Buchalter proceeds in good faith and (ii)
for his reasonable attorneys fees incurred in connection with the preparation,
negotiation and execution of the July 2009 amendment to the agreement.

Resignation
of Mr. Buchalter

On February
19, 2010, Jeffrey Buchalter resigned as President and Chief Executive Officer
and as a director of the Company, effective as of February 22, 2010. In light
of Mr. Buchalters resignation, on February 20, 2010, the Board of Directors
created an Executive Committee, comprised of Dr. Denner, Professor Mulligan and
Mr. Classon, to serve as a search committee for a new Chief Executive Officer.
On February 22, 2010, the Executive Committee appointed Mr. del Campo,
previously the Companys Executive Vice President, Technical Operations, as the
Companys Chief Operating Officer and designated him as Principal Executive
Officer, and appointed Dr. Horak, previously the Companys Executive Vice
President, Research and Development and Chief Scientific Officer, as the
Companys President of Research and Development.

While final
settlement terms remain under negotiation, Mr. Buchalter may receive severance
payments including certain insurance benefits of up to $3.8 million. In
addition, approximately 281,000 stock options, 67,000 shares of restricted
stock and 225,000 restricted stock units are subject to accelerated vesting as
of his date of resignation, subject to certain conditions.

Craig
A. Tooman

In June
2008, we entered into an amended and restated employment agreement with Craig
A. Tooman, pursuant to which Mr. Tooman retained his position of Executive Vice
President, Finance and Chief Financial Officer and was further appointed to
serve as the senior executive overseeing the human resources and information
technology functions. The employment agreement, as amended, will be effective
until June 18, 2011, subject to automatic renewal for an additional twenty-four
months unless either party provides written notice of non-renewal to the other
party no later than 90 days prior to June 18, 2011.

The amended
and restated agreement provides for a base salary, which is currently $505,000
per year, subject to increase, and Mr. Tooman will be eligible to receive an
annual performance-based cash bonus in an amount between zero and 120% of base
salary, with an annual target bonus of 60% of base salary, based on individual
and/or corporate factors to be established and determined by the Board of
Directors each year and described above under Annual Performance-Based
Incentive Compensation.

In the
event Mr. Toomans employment is terminated without cause (as defined in Mr.
Toomans employment agreement) or for good reason (as defined in Mr. Toomans
employment agreement), Mr. Tooman will be entitled to receive: (i) a cash
payment equal to any unpaid base salary through the date of termination plus
any earned bonus relating to the preceding fiscal year that remains unpaid on
the date of termination, (ii) a cash payment equal to one year of his base
salary, (iii) a cash payment equal to the target bonus which would have been
payable for the fiscal year which commences immediately following the date of
his termination and (iv) a cash payment equal to a pro rata portion of his
target bonus for the fiscal year during which the

8

---



termination occurs. In addition, Mr. Tooman will be entitled to
reimbursement for any medical and dental coverage available to him and his
family members for a period of up to 18 months commencing on the date of
termination, all options and shares of restricted stock initially granted by
the Company to Mr. Tooman pursuant to his original January 2005 employment
agreement and the June 2005 amendment thereof that have not vested at the time
of termination will vest immediately upon termination, and Mr. Tooman will
continue to be entitled to any deferred compensation and any other unpaid
amounts and benefits earned and vested prior to or as a result of his
termination.

If we
experience a change of control (as defined in Mr. Toomans employment
agreement) and Mr. Toomans employment is terminated without cause or for good
reason within the period commencing 90 days before such change in control and
ending one year after the change of control, Mr. Tooman will be entitled to
receive: (i) a cash payment equal to any unpaid base salary through the date of
termination plus any earned bonus relating to the preceding fiscal year that
remains unpaid on the date of termination, (ii) a cash payment equal to two
times the sum of his base salary and target bonus for the fiscal year in which
the termination occurs and (iii) a cash payment equal to a pro rata portion of
his target bonus for the fiscal year during which the termination occurs. In
addition, Mr. Tooman will be entitled to reimbursement for any medical and
dental coverage available to him and his family members for a period of up to
36 months commencing on the date of termination, and Mr. Tooman will continue
to be entitled to any deferred compensation and any other unpaid amounts and
benefits earned and vested prior to or as a result of his termination. Further,
upon a change of control any of Mr. Toomans options to purchase Common Stock
and shares of restricted Common Stock and restricted stock units that have been
granted to him, but not yet vested, prior to the effective date of the change of
control shall vest at such time.

If any
payments or compensation received by Mr. Tooman in connection with a change of
control are subject to an excise tax under Section 4999 of the Internal Revenue
Code, Mr. Tooman will be entitled to receive additional payments to make him
whole with respect to such excise taxes.

Mr.
Toomans employment agreement requires him to maintain the confidentiality of
our proprietary information during the term of his agreement and thereafter.
Mr. Tooman is precluded from competing with us during the term of his
employment agreement and for one year after his employment is terminated.

Ivan
D. Horak, M.D.

In
September 2005, we entered into an employment agreement with Ivan D. Horak,
pursuant to which Dr. Horak was appointed our Executive Vice President,
Research and Development and Chief Scientific Officer. The employment agreement
will be effective until September 2, 2009, subject to automatic renewal for an
additional twenty-four months unless either party provides written notice of
non-renewal to the other party no later than 90 days prior to September 2,
2009. As noted above, on February 22, 2010, Dr. Horak was appointed by the
Executive Committee to serve as the Companys President of Research and
Development. The terms of Dr. Horaks employment agreement have not been
modified in connection with that appointment.

The
agreement provides for a base salary, which is currently $533,663 per year,
subject to increase, and Dr. Horak will be eligible to receive an annual
performance-based cash bonus in an amount between zero and 120% of base salary,
based on individual and/or corporate factors to be established and determined
by the Board of Directors each year and described above under Annual
Performance-Based Incentive Compensation. The Compensation Committee has set
Dr. Horaks annual target bonus at 60% of his base salary.

In the
event Dr. Horaks employment is terminated without cause (as defined in Dr.
Horaks employment agreement) or for good reason (as defined in the employment
agreement), Dr. Horak will be entitled to receive: (i) a cash payment equal to
any unpaid base salary through the date of termination plus any earned bonus
relating to the preceding fiscal year that remains unpaid on the date of
termination, (ii) a cash payment equal to one year of his base salary, (iii) a
cash payment equal to the target bonus which would have been payable for the
fiscal year which commences immediately following the date of his termination
and (iv) a cash payment equal to a pro rata portion of his target bonus for the
fiscal year during which the termination occurs. In addition, Dr. Horak will be
entitled to reimbursement for any medical and dental coverage available to him
and his family members for a period of up to 18 months commencing on the date
of termination, all options and shares of restricted stock initially granted by
the Company to Dr. Horak under the employment agreement that have not vested at
the time of termination will vest immediately upon termination, and Dr. Horak
will continue

9

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to be entitled to any deferred compensation and any other unpaid
amounts and benefits earned and vested prior to or as a result of his
termination.

If we
experience a change of control (as defined in Dr. Horaks employment agreement)
and Dr. Horaks employment is terminated without cause or for good reason
within the period commencing 90 days before such change in control and ending
one year after the change of control, Dr. Horak will be entitled to receive:
(i) a cash payment equal to any unpaid base salary through the date of
termination plus any earned bonus relating to the preceding fiscal year that
remains unpaid on the date of termination, (ii) a cash payment equal to two
times the sum of his base salary and target bonus for the fiscal year in which
the termination occurs and (iii) a cash payment equal to a pro rata portion of
his target bonus for the fiscal year during which the termination occurs. In
addition, Dr. Horak will be entitled to reimbursement for any medical and
dental coverage available to him and his family members who were covered by our
group health plan at the time of his termination for a period of up to 24
months commencing on the date of termination, and Dr. Horak will continue to be
entitled to any deferred compensation and any other unpaid amounts and benefits
earned and vested prior to or as a result of his termination. Further, upon a
change of control any of Dr. Horaks options to purchase Common Stock and
shares of restricted Common Stock and restricted stock units that have been
granted to him, but not yet vested, prior to the effective date of the change
of control shall vest at such time.

Dr. Horaks
employment agreement requires him to maintain the confidentiality of our
proprietary information during the term of his agreement and thereafter. Dr.
Horak is precluded from competing with us during the term of his employment
agreement and for one year after his employment is terminated.

Ralph
del Campo

In May
2004, we entered into an amended and restated severance agreement with Mr. del
Campo, the initial term of which expired on December 31, 2004, with an
automatic renewal for an additional twelve months in January of each year,
unless the Company provides notice of non-renewal by September 30 of the
preceding year. Notwithstanding such notice by the Company not to extend, in
the event that there occurs, during the term, a change in control (as defined
in Mr. del Campos amended and restated severance agreement), the agreement
shall then continue in effect for a period of twelve months beyond the date of
such change of control. The severance agreement was further amended in November
2007. As noted above, on February 22, 2010, Mr. del Campo was appointed by the
Executive Committee to serve as the Companys Chief Operating Officer and was
designated the Companys Principal Executive Officer. The terms of Mr. del
Campos severance agreement have not been modified in connection with that
appointment and designation.

Under the
amended agreement, if we experience a change of control and Mr. del Campos
employment is terminated without cause (as defined in Mr. del Campos amended
and restated severance agreement, as amended) or for good reason (as defined in
Mr. del Campos amended and restated severance agreement, as amended) within
the period commencing 90 days before such change of control and ending one year
after the change of control, Mr. del Campo will be entitled to receive: (i) a
cash payment equal to any unpaid base salary through the date of termination,
(ii) a cash payment equal to a pro rated portion of the target bonus which
would be payable for the fiscal year during which such termination occurs,
(iii) a cash payment equal to two times the sum of his annual base salary and
the target bonus which would be payable for the fiscal year in which such
termination occurs, (iv) reimbursement for any medical and dental coverage
available to Mr. del Campo and any family member for a period of up to 18
months commencing on the date of termination, (v) all options to acquire shares
of Company Common Stock shall fully vest prior to the effective date of the
change in control, and any options not exercised prior to the effective date of
the change in control shall terminate as of the effective date, and (vi) all
shares of restricted stock and/or restricted stock units will fully vest.

Paul
S. Davit

In May
2004, we entered into an amended and restated severance agreement with Mr.
Davit, the initial term of which expired on December 31, 2004, with an
automatic renewal for an additional twelve months in January of each year,
unless the Company provides notice of non-renewal by September 30 of the
preceding year. Notwithstanding such notice by the Company not to extend, in
the event that there occurs, during the term, a change in control (as defined
in Mr. Davits amended and restated severance agreement), the agreement shall
then continue in effect for a period of twelve months beyond the date of such
change of control. The severance agreement was further amended in November
2007.

10

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Under the
amended agreement, if we experience a change of control and Mr. Davits
employment is terminated without cause (as defined in Mr. Davits amended and
restated severance agreement, as amended) or for good reason (as defined in Mr.
Davits amended and restated severance agreement, as amended) within the period
commencing 90 days before such change of control and ending one year after the
change of control, Mr. Davit will be entitled to receive: (i) a cash payment
equal to any unpaid base salary through the date of termination, (ii) a cash
payment equal to a pro rated portion of the target bonus which would be payable
for the fiscal year during which such termination occurs, (iii) a cash payment
equal to two times the sum of his annual base salary and the target bonus which
would be payable for the fiscal year in which such termination occurs, (iv)
reimbursement for any medical and dental coverage available to Mr. Davit and
any family members for a period of up to 18 months commencing on the date of
termination, (v) all options to acquire shares of Company Common Stock shall
fully vest prior to the effective date of the change in control, and any
options not exercised prior to the effective date of the change in control
shall terminate as of the effective date, and (vi) all shares of restricted
stock and/or restricted stock units will fully vest.

Executive Deferred Compensation Plan

The
Companys Executive Deferred Compensation Plan provides a select group of our
management or highly compensated employees with the opportunity to defer the
receipt of certain compensation. To attract and retain key talent, the Company
needs to provide programs that are competitive within our industry. By allowing
tax-deferred income growth, executives are incentivized to remain with the
Company long-term, providing more stability to management. The plan is
administered in a manner that complies with Section 409A of the Internal
Revenue Code.

The
Companys obligation for compensation deferred under the plan are that of an
unfunded and unsecured promise to pay money in the future to participating
eligible employees in accordance with the terms of the plan from the general
assets of the Company, and those obligations rank pari passuwith other unsecured and unsubordinated
indebtedness of the Company from time to time outstanding.

Each
participant may elect to defer under the plan all or a portion of his or her
base salary and/or annual cash or equity incentive compensation that may
otherwise be payable or that may otherwise vest in a calendar year. In
addition, the committee administering the plan may, in its sole discretion,
award non-elective deferred compensation to a participant. Any credit of
non-elective deferred compensation will vest in accordance with the schedule
determined by the committee and be distributed in a manner consistent with the
election last made by the particular participant.

A
participants compensation deferrals are credited to the participants account
maintained under the Plan. Each participant allocates his or her account among
the deemed investment options available under the plan from time to time.
Amounts credited to participants accounts for each year are adjusted for
earnings or losses based on the deemed investment options elected by the
participant. We are not obligated to actually invest any deferred amounts in
those investment options. Each participants account is credited on a daily
basis with a deemed rate of interest and/or earnings or losses depending upon
the investment performance of the deemed investment option. Participants can
currently choose from a list of 11 deemed investment options of various asset
classes which are administered by an outside registered broker. All deemed
investment options, such as money market, bond, stock or other mutual funds,
are at market interest rates.

A participants
account will be credited with an excess 401(k) matching credit. The matching
credit is 50% of the value of the matchable annual deferral for the Plan year
where the matchable annual deferral is that portion of a participants deferral
amount for each plan year which is less than or equal to: (i) 6% of total base
salary plus annual incentive compensation for a plan year, minus (ii) the
amount contributed by the participant to the Companys 401(k) Savings and
Investment Plan for which the participant received an employer matching
contribution under that 401(k) Plan. The matchable annual deferral for a plan
year shall be zero if the participant does not make the maximum deferral
eligible for a matching contribution under that 401(k) Plan for the plan year.
A participants right to receive the matching credit vests over a five year
period.

Each
participant may generally elect the time and manner of payment of the deferred
compensation. At the election of the participant, payment of the deferred compensation
may be made in a lump sum or in annual installments. The time for payment
elected by the participant must be a specific date selected at the time of
election or the date of the participants separation from service. In the event
of a change in control of the Company as defined under the plan, payments will
be made in the form of a lump sum.

11

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The
deferred compensation is not subject to redemption, in whole or in part, prior
to the individual payment dates selected by the participants, except that
participants may withdraw all or a portion of the value of their plan accounts
under certain specified circumstances and certain mandatory lump sum
distributions may be made. We reserve the right to amend or terminate the plan
at any time, provided that, except as otherwise provided in the plan, no
amendment can decrease the benefits to a participant on compensation deferred
prior to the date of the amendment without the consent of the participant.

Share Ownership Guidelines for Senior
Management

The Board
of Directors approved share ownership guidelines for our senior management.
These guidelines are applicable to our Chief Executive Officer, executive
officers and other Vice President level employees. Under the share ownership
guidelines, members of senior management are encouraged to acquire and maintain
share holdings in our Common Stock in amounts expressed as a multiple of base
salary. The guidelines provide for a four-year window within which the share
ownership level is to be achieved. These ownership guidelines are designed to
further align executive ownership, long-term strategic thinking and
compensation programs to our performance and the interests of our stockholders.

The
following multiples of base salary apply:

| |                                                                |                                                                                                                             
| | -------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------
| |                                                               | three times
 base salary for the Chief Executive Officer;                                                                   
| |                                                                |                                                                                                                             
| |                                                               | two times
 base salary for other executive officers and Vice President level employees.                                     
| |                                                                |                                                                                                                             
| | The
 following will be counted in determining share ownership:
| |                                                                |                                                                                                                             
| |                                                               | shares purchased
 on the open market;                                                                                       
| |                                                                |                                                                                                                             
| |                                                               | shares owned
 jointly with or separately by spouse and/or children;                                                         
| |                                                                |                                                                                                                             
| |                                                               | shares held
 by the individual in the Companys 401(k) plan;                                                                
| |                                                                |                                                                                                                             
| |                                                               | shares
 obtained through stock option exercise;                                                                             
| |                                                                |                                                                                                                             
| |                                                               | restricted
 stock or restricted stock units;                                                                                
| |                                                                |                                                                                                                             
| |                                                               | vested and
 in the money unexercised options, provided that these shares may not exceed
 50% of the requirement total; and
| |                                                                |                                                                                                                             
| |                                                               | shares
 purchased pursuant to the Companys 2007 Employee Stock Purchase Plan or
 other employee purchase plans.            

Impact of Tax and Accounting
Treatment on Compensation

The
accounting and tax treatment of compensation generally has not been a factor in
determining the amounts of compensation for our executive officers. However, the
Compensation Committee and management have considered the accounting and tax
impact of various program designs to balance the potential cost to the Company
with the benefit/value to the executive.

The Company
seeks to maximize the deductibility for tax purposes of all elements of
compensation. Section 162(m) of the Internal Revenue Code limits the
deductibility for federal income taxes of compensation in excess of $1 million
paid to a publicly held companys chief executive officer and any of the other
four highest-paid executive officers, except for performance-based
compensation. The Compensation Committee is aware of this limitation and
considers the effects of Section 162(m) when making compensation decisions.

Conclusion

We believe
our compensation policies and practices have attracted the best talent
available, maintains their connection to the Company and aligns their long-term
interests with our stockholders.

Historical Compensation of our
Executive Officers

The
following tables and descriptive materials set forth compensation information
earned for services rendered to the Company by the Companys Chief Executive
Officer, Chief Financial Officer, and the next three most highly compensated
executive officers for fiscal year 2009 who were serving as executive officers
at the end of fiscal year 2009. We refer to these persons collectively as our
Named Executive Officers.

12

---



Summary Compensation Table

|                                                         |  |      |  |             |  |                       |  |                        |  |                                                  |  |                                 |  |           | 
|-------------------------------------------------------- |  | ---- |  | ----------- |  | --------------------- |  | ---------------------- |  | ------------------------------------------------ |  | ------------------------------- |  | --------- | 
|Name and
 Principal Position                             |  | Year |  | Salary
 ($) |  | Stock
 Awards
 ($)(4) |  | Option
 Awards
 ($)(4) |  | Non-Equity
 Incentive Plan
 Compensation
 ($)(5) |  | All Other
 Compensation
 ($)(6) |  | Total ($) | 
|                                                         |  |      |  |             |  |                       |  |                        |  |                                                  |  |                                 |  |           | 
|Jeffrey H. Buchalter,                                    |  | 2009 |  | 855,000     |  |                      |  |                       |  | 375,000                                          |  | 98,267                          |  | 1,328,268 | 
|President and Chief                                      |  | 2008 |  | 853,271     |  | 1,864,000             |  |                       |  | 1,111,500                                        |  | 178,974                         |  | 4,007,746 | 
|Executive Officer(1)                                     |  | 2007 |  | 773,558     |  | 859,000               |  | 3,070,455              |  | 1,162,500                                        |  | 208,495                         |  | 6,074,008 | 
|                                                        
|Craig A. Tooman,                                         |  | 2009 |  | 505,000     |  |                      |  |                       |  | 137,500                                          |  | 38,055                          |  | 680,555   | 
|Executive Vice President,                                |  | 2008 |  | 501,286     |  | 512,600               |  |                       |  | 400,000                                          |  | 92,992                          |  | 1,506,878 | 
|Finance and Chief Financial Officer                      |  | 2007 |  | 439,231     |  | 214,750               |  | 1,083,690              |  | 425,000                                          |  | 125,873                         |  | 2,288,544 | 
|                                                        
|Ivan D. Horak, M.D.,                                     |  | 2009 |  | 533,663     |  |                      |  |                       |  | 162,500                                          |  | 34,028                          |  | 730,191   | 
|Executive Vice President,                                |  | 2008 |  | 532,857     |  | 512,600               |  |                       |  | 320,000                                          |  | 38,872                          |  | 1,404,329 | 
|Research and Development
 andChief Scientific Officer(2) |  | 2007 |  | 498,293     |  | 214,750               |  | 1,083,690              |  | 350,000                                          |  | 26,235                          |  | 2,172,968 | 
|                                                        
|Ralph del Campo,                                         |  | 2009 |  | 412,885     |  |                      |  |                       |  | 125,000                                          |  | 37,828                          |  | 575,714   | 
|Executive Vice President,                                |  | 2008 |  | 412,263     |  | 512,600               |  |                       |  | 320,000                                          |  | 33,184                          |  | 1,278,046 | 
|Technical Operations(3)                                  |  | 2007 |  | 385,522     |  | 214,750               |  | 1,083,690              |  | 250,000                                          |  | 19,588                          |  | 1,953,550 | 
|                                                        
|Paul S. Davit,                                           |  | 2009 |  | 349,830     |  |                      |  |                       |  | 75,000                                           |  | 17,730                          |  | 442,560   | 
|Executive Vice President,                                |  | 2008 |  | 349,520     |  | 93,200                |  |                       |  | 140,000                                          |  | 18,942                          |  | 601,661   | 
|Human Resources                                          |  | 2007 |  | 336,156     |  |                      |  | 361,230                |  | 140,000                                          |  | 15,618                          |  | 853,004   | 

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(1) | Mr. Buchalter resigned from his position as President and Chief
 Executive Officer and a director of the Company effective February 22, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(2) | Dr. Horak was appointed as President of Research and Development of
 the Company effective February 22, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(3) | Mr. del Campo was appointed as Chief Operating Officer and Principal
 Executive Officer of the Company effective February 22, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(4) | Dollar value of stock awards and option awards shown in this table is
 the aggregate grant date fair value of such awards calculated in accordance
 with FASB ASC Topic 718. Assumptions used in the calculations are included in
 the Companys audited financial statements for the year ended December 31,
 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(5) | Includes cash bonus payments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(6) | All Other Compensation for the years ended December 31, 2009, 2008
 and 2007 includes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | For Mr. Buchalter, matching contribution to executive deferred
 compensation plan of $53,474, $53,573 and $46,957 for 2009, 2008 and 2007,
 respectively, matching contribution to 401(k) plan of $7,350, $6,900 and
 $6,750 for 2009, 2008 and 2007, respectively, tax preparation and financial
 planning fees of $10,000, $41,268 and $19,631 for 2009, 2008 and 2007,
 respectively, premium for life and disability insurance of $15,000, $21,923
 and $23,510 for 2009, 2008 and 2007, respectively, use of company leased
 aircraft of $12,443, $23,261 and $0 for 2009, 2008 and 2007, respectively,
 use of company automobile and driver of $0, $4,011 and $3,570 for 2009, 2008
 and 2007 respectively, home security of $70,806 for 2007, and tax make-whole
 payments of $0, $28,038 and $37,271 for 2009, 2008 and 2007, respectively.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | For Mr. Tooman, matching contribution to executive deferred
 compensation plan of $19,800, $21,250 and $17,427 for 2009, 2008 and 2007,
 respectively, matching contribution to 401(k) plan of $7,350, $6,900 and
 $6,750 for 2009, 2008 and 2007, respectively, discount to market price for
 purchases under Employee Stock Purchase Plan of $2,088, $9,076 and $4,855 for
 2009, 2008 and 2007, respectively, tax preparation and financial planning
 fees of $7,500, $34,308 and $22,272 for 2009, 2008 and 2007, respectively,
 home security of $72,910 and $132,350 for 2007 and 2006, respectively, and
 tax make-whole payments of $0, $21,458 and $1,659 for 2009, 2008 and 2007,
 respectively.                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    | For Dr. Horak, matching contribution to executive deferred
 compensation plan of $19,101, $19,891 and $16,199 for 2009, 2008 and 2007,
 respectively, matching contribution to 401(k) plan of $7,350, $6,900 and
 $5,181 for 2009, 2008 and 2007, respectively, discount to market price for
 purchases under Employee Stock Purchase Plan of $0, $1,903 and $4,855 for
 2009, 2008 and 2007, respectively, tax preparation and financial planning
 fees of $7,577 and $7,450 for 2009 and 2008, respectively and tax make-whole
 payments of $0 and $2,728 for 2009 and 2008, respectively.                                                                                                                                                                                                                                                        

13

---



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | For Mr. del Campo, matching contribution to executive deferred
 compensation plan of $14,637, $12,137 and $0 for 2009, 2008 and 2007,
 respectively, matching contribution to 401(k) plan of $7,350, $6,900 and
 $5,729 for 2009, 2008 and 2007, respectively, discount to market price for
 purchases under Employee Stock Purchase Plan of $8,341, $4,193 and $3,020 for
 2009, 2008 and 2007, respectively, tax preparation and financial planning
 fees of $7,500, $7,800 and $7,500 for 2009, 2008 and 2007, respectively, and
 tax make-whole payments of $0, $2,154 and $3,339 for 2009, 2008 and 2007,
 respectively.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | For Mr. Davit, matching contribution to executive deferred
 compensation plan of $7,578, $7,786 and $6,235 for 2009, 2008 and 2007,
 respectively, matching contribution to 401(k) plan of $7,350, $6,900 and
 $6,750 for 2009, 2008 and 2007, respectively, and discount to market price
 for purchases under Employee Stock Purchase Plan of $2,802, $4,256 and $2,633
 for 2009, 2008 and 2007, respectively.                                                                                                                                                                                                             

Grants of Plan-Based Awards in Last Fiscal
Year

In 2009,
there were no equity or non-equity awards granted to the Named Executive
Officers under our equity and non-equity incentive plans.

Outstanding Equity Awards at Fiscal Year-End

The
following table sets forth information with respect to unexercised options, and
restricted stock awards and restricted stock units that have not vested for
each of the Named Executive Officers as of December 31, 2009.

|                        |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  |                                                                                                                                          |  |  |           |  |  |         |  |  |           | 
|----------------------- |  | ------------------------------------------------------------------------ | ------- | -------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------- |  | ---------------------- | ------- | -------------------- |  | ----------------------------------------------------- |  | ------------------------------------------------------------- | ---------- | ------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------- |  |  | --------- |  |  | ------- |  |  | --------- | 
|                        |  | OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2009                        |        
|                        |  |                                                                          |        
|                        |  | OPTION AWARDS                                                            |         | STOCK AWARDS                                                               | 
|                        |  |                                                                          |         |                                                                            | 
|Name                    |  | Number of
 Securities
 Underlying
 Unexercised
 Options (#)
 Exercisable |         | Number of
 Securities
 Underlying
 Unexercised
 Options (#)
 Unexercisable |  | EquityIncentivePlanAwards:Number ofSecuritiesUnderlyingUnexercisedUnearnedOptions (#) |  | OptionExercisePrice($) |         | OptionExpirationDate |  | Numberof Sharesor Unitsof StockThat HaveNot Vested(#) |  | MarketValue ofSharesor Unitsof StockThat HaveNot Vested($)(1) |            | EquityIncentivePlanAwards:Number ofUnearnedShares,Units orOtherRightsThat HaveNot Vested(#) |  | Equity
 Incentive
 Plan
 Awards:
 Market or
 Payout
 Value of
 Unearned
 Shares,
 Units or
 Other
 Rights
 That Have
 Not Vested
 ($)(1) | 
|                        |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  |                                                                                                                                          | 
|Jeffrey H. Buchalter(2) |  |                                                                          | 40,000  |                                                                            |  |                                                                                       |  |                        |         |                      |  | 15.46                                                 |  |                                                               | 9/28/2014  |                                                                                             |  |                                                                                                                                          |  |  |           |  |  |         |  |  |           | 
|                        |  |                                                                          | 725,000 |                                                                            |  |                                                                                       |  |                        |         |                      |  | 13.54                                                 |  |                                                               | 12/22/2014 |                                                                                             |  |                                                                                                                                          |  |  |           |  |  |         |  |  |           | 
|                        |  |                                                                          | 750,000 |                                                                            |  |                                                                                       |  |                        |         |                      |  | 6.95                                                  |  |                                                               | 5/12/2015  |                                                                                             |  |                                                                                                                                          |  |  |           |  |  |         |  |  |           | 
|                        |  |                                                                          | 300,000 |                                                                            |  |                                                                                       |  |                        |         |                      |  | 6.97                                                  |  |                                                               | 11/23/2015 |                                                                                             |  |                                                                                                                                          |  |  |           |  |  |         |  |  |           | 
|                        |  |                                                                          | 305,357 |                                                                            |  | 62,543                                                                                |  |                        | 62,543  |                      |  | 8.04                                                  |  |                                                               | 4/3/2016   |                                                                                             |  |                                                                                                                                          |  |  |           |  |  |         |  |  |           | 
|                        |  |                                                                          | 361,880 |                                                                            |  | 74,120                                                                                |  |                        | 74,120  |                      |  | 7.40                                                  |  |                                                               | 5/18/2016  |                                                                                             |  |                                                                                                                                          |  |  |           |  |  |         |  |  |           | 
|                        |  |                                                                          | 561,000 |                                                                            |  | 289,000                                                                               |  |                        | 289,000 |                      |  | 8.59                                                  |  |                                                               | 1/17/2017  |                                                                                             |  |                                                                                                                                          |  |  |           |  |  |         |  |  |           | 
|                        |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 48,000                                                                                                                                   |  |  | 505,440   |  |  | 48,000  |  |  | 505,440   | 
|                        |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 138,670                                                                                                                                  |  |  | 1,460,195 |  |  | 138,670 |  |  | 1,460,195 | 
|                        |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 33,334                                                                                                                                   |  |  | 351,007   |  |  | 33,334  |  |  | 351,007   | 
|                        |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 133,334                                                                                                                                  |  |  | 1,404,007 |  |  | 133,334 |  |  | 1,404,007 | 
|Craig A. Tooman(3)      |  |                                                                          | 125,000 |                                                                            |  |                                                                                       |  |                        |         |                      |  | 13.08                                                 |  |                                                               | 1/5/2015   |                                                                                             |  |                                                                                                                                          |  |  |           |  |  |         |  |  |           | 
|                        |  |                                                                          | 50,000  |                                                                            |  |                                                                                       |  |                        |         |                      |  | 6.95                                                  |  |                                                               | 5/12/2015  |                                                                                             |  |                                                                                                                                          |  |  |           |  |  |         |  |  |           | 
|                        |  |                                                                          | 50,000  |                                                                            |  |                                                                                       |  |                        |         |                      |  | 5.73                                                  |  |                                                               | 6/10/2015  |                                                                                             |  |                                                                                                                                          |  |  |           |  |  |         |  |  |           | 
|                        |  |                                                                          | 50,000  |                                                                            |  |                                                                                       |  |                        |         |                      |  | 6.97                                                  |  |                                                               | 11/23/2015 |                                                                                             |  |                                                                                                                                          |  |  |           |  |  |         |  |  |           | 
|                        |  |                                                                          | 77,626  |                                                                            |  | 25,875                                                                                |  |                        | 25,875  |                      |  | 8.04                                                  |  |                                                               | 4/3/2016   |                                                                                             |  |                                                                                                                                          |  |  |           |  |  |         |  |  |           | 
|                        |  |                                                                          | 92,025  |                                                                            |  | 30,675                                                                                |  |                        | 30,675  |                      |  | 7.40                                                  |  |                                                               | 5/18/2016  |                                                                                             |  |                                                                                                                                          |  |  |           |  |  |         |  |  |           | 
|                        |  |                                                                          | 150,000 |                                                                            |  | 150,000                                                                               |  |                        | 150,000 |                      |  | 8.59                                                  |  |                                                               | 1/17/2017  |                                                                                             |  |                                                                                                                                          |  |  |           |  |  |         |  |  |           | 
|                        |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 10,000                                                                                                                                   |  |  | 105,300   |  |  | 10,000  |  |  | 105,300   | 
|                        |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 6,000                                                                                                                                    |  |  | 63,180    |  |  | 6,000   |  |  | 63,180    | 
|                        |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 4,000                                                                                                                                    |  |  | 42,120    |  |  | 4,000   |  |  | 42,120    | 
|                        |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 39,060                                                                                                                                   |  |  | 411,302   |  |  | 39,060  |  |  | 411,302   | 
|                        |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 8,334                                                                                                                                    |  |  | 87,757    |  |  | 8,334   |  |  | 87,757    | 
|                        |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 36,667                                                                                                                                   |  |  | 386,104   |  |  | 6,667   |  |  | 386,104   | 
|Ivan D. Horak, M.D.(4)  |  |                                                                          | 200,000 |                                                                            |  |                                                                                       |  |                        |         |                      |  | 7.14                                                  |  |                                                               | 9/2/2015   |                                                                                             |  |                                                                                                                                          |  |  |           |  |  |         |  |  |           | 
|                        |  |                                                                          | 35,000  |                                                                            |  |                                                                                       |  |                        |         |                      |  | 6.97                                                  |  |                                                               | 11/23/2015 |                                                                                             |  |                                                                                                                                          |  |  |           |  |  |         |  |  |           | 
|                        |  |                                                                          | 92,175  |                                                                            |  | 30,725                                                                                |  |                        | 30,725  |                      |  | 8.04                                                  |  |                                                               | 4/3/2016   |                                                                                             |  |                                                                                                                                          |  |  |           |  |  |         |  |  |           | 
|                        |  |                                                                          | 109,275 |                                                                            |  | 36,425                                                                                |  |                        | 36,425  |                      |  | 7.40                                                  |  |                                                               | 5/18/2016  |                                                                                             |  |                                                                                                                                          |  |  |           |  |  |         |  |  |           | 
|                        |  |                                                                          | 150,000 |                                                                            |  | 150,000                                                                               |  |                        | 150,000 |                      |  | 8.59                                                  |  |                                                               | 1/17/2017  |                                                                                             |  |                                                                                                                                          |  |  |           |  |  |         |  |  |           | 
|                        |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 20,000                                                                                                                                   |  |  | 210,600   |  |  | 20,000  |  |  | 210,600   | 
|                        |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 3,000                                                                                                                                    |  |  | 31,590    |  |  | 3,000   |  |  | 31,590    | 
|                        |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 46,340                                                                                                                                   |  |  | 487,960   |  |  | 46,340  |  |  | 487,960   | 
|                        |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 8,334                                                                                                                                    |  |  | 87,757    |  |  | 8,334   |  |  | 87,757    | 
|                        |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 36,667                                                                                                                                   |  |  | 386,104   |  |  | 36,667  |  |  | 386,104   | 

14

---



|                   |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  |                                                                                                                                          |  |  |         |  |  |        |  |  |         | 
|------------------ |  | ------------------------------------------------------------------------ | ------- | -------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------- |  | ---------------------- | ------- | -------------------- |  | ----------------------------------------------------- |  | ------------------------------------------------------------- | ---------- | ------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------- |  |  | ------- |  |  | ------ |  |  | ------- | 
|                   |  | OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2009                        |        
|                   |  |                                                                          |        
|                   |  | OPTION AWARDS                                                            |         | STOCK AWARDS                                                               | 
|                   |  |                                                                          |         |                                                                            | 
|Name               |  | Number of
 Securities
 Underlying
 Unexercised
 Options (#)
 Exercisable |         | Number of
 Securities
 Underlying
 Unexercised
 Options (#)
 Unexercisable |  | EquityIncentivePlanAwards:Number ofSecuritiesUnderlyingUnexercisedUnearnedOptions (#) |  | OptionExercisePrice($) |         | OptionExpirationDate |  | Numberof Sharesor Unitsof StockThat HaveNot Vested(#) |  | MarketValue ofSharesor Unitsof StockThat HaveNot Vested($)(1) |            | EquityIncentivePlanAwards:Number ofUnearnedShares,Units orOtherRightsThat HaveNot Vested(#) |  | Equity
 Incentive
 Plan
 Awards:
 Market or
 Payout
 Value of
 Unearned
 Shares,
 Units or
 Other
 Rights
 That Have
 Not Vested
 ($)(1) | 
|                   |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  |                                                                                                                                          | 
|Ralph del Campo(5) |  |                                                                          | 100,000 |                                                                            |  |                                                                                       |  |                        |         |                      |  | 18.40                                                 |  |                                                               | 10/2/2012  |                                                                                             |  |                                                                                                                                          |  |  |         |  |  |        |  |  |         | 
|                   |  |                                                                          | 30,000  |                                                                            |  |                                                                                       |  |                        |         |                      |  | 14.15                                                 |  |                                                               | 2/6/2014   |                                                                                             |  |                                                                                                                                          |  |  |         |  |  |        |  |  |         | 
|                   |  |                                                                          | 30,000  |                                                                            |  |                                                                                       |  |                        |         |                      |  | 15.13                                                 |  |                                                               | 3/26/2014  |                                                                                             |  |                                                                                                                                          |  |  |         |  |  |        |  |  |         | 
|                   |  |                                                                          | 50,000  |                                                                            |  |                                                                                       |  |                        |         |                      |  | 6.95                                                  |  |                                                               | 5/12/2015  |                                                                                             |  |                                                                                                                                          |  |  |         |  |  |        |  |  |         | 
|                   |  |                                                                          | 50,000  |                                                                            |  |                                                                                       |  |                        |         |                      |  | 6.97                                                  |  |                                                               | 11/23/2015 |                                                                                             |  |                                                                                                                                          |  |  |         |  |  |        |  |  |         | 
|                   |  |                                                                          | 58,500  |                                                                            |  | 19,500                                                                                |  |                        | 19,500  |                      |  | 8.04                                                  |  |                                                               | 4/3/2016   |                                                                                             |  |                                                                                                                                          |  |  |         |  |  |        |  |  |         | 
|                   |  |                                                                          | 69,375  |                                                                            |  | 23,125                                                                                |  |                        | 23,125  |                      |  | 7.40                                                  |  |                                                               | 5/18/2016  |                                                                                             |  |                                                                                                                                          |  |  |         |  |  |        |  |  |         | 
|                   |  |                                                                          | 150,000 |                                                                            |  | 150,000                                                                               |  |                        | 150,000 |                      |  | 8.59                                                  |  |                                                               | 1/17/2017  |                                                                                             |  |                                                                                                                                          |  |  |         |  |  |        |  |  |         | 
|                   |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 6,000                                                                                                                                    |  |  | 63,180  |  |  | 6,000  |  |  | 63,180  | 
|                   |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 4,000                                                                                                                                    |  |  | 42,120  |  |  | 4,000  |  |  | 42,120  | 
|                   |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 29,400                                                                                                                                   |  |  | 309,582 |  |  | 29,400 |  |  | 309,582 | 
|                   |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 8,334                                                                                                                                    |  |  | 87,757  |  |  | 8,334  |  |  | 87,757  | 
|                   |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 36,667                                                                                                                                   |  |  | 386,104 |  |  | 36,667 |  |  | 386,104 | 
|Paul S. Davit(6)   |  |                                                                          | 25,000  |                                                                            |  |                                                                                       |  |                        |         |                      |  | 42.78                                                 |  |                                                               | 3/1/2012   |                                                                                             |  |                                                                                                                                          |  |  |         |  |  |        |  |  |         | 
|                   |  |                                                                          | 25,000  |                                                                            |  |                                                                                       |  |                        |         |                      |  | 42.782                                                |  |                                                               | 3/1/2012   |                                                                                             |  |                                                                                                                                          |  |  |         |  |  |        |  |  |         | 
|                   |  |                                                                          | 30,000  |                                                                            |  |                                                                                       |  |                        |         |                      |  | 3.66                                                  |  |                                                               | 8/13/2012  |                                                                                             |  |                                                                                                                                          |  |  |         |  |  |        |  |  |         | 
|                   |  |                                                                          | 30,000  |                                                                            |  |                                                                                       |  |                        |         |                      |  | 14.15                                                 |  |                                                               | 2/6/2014   |                                                                                             |  |                                                                                                                                          |  |  |         |  |  |        |  |  |         | 
|                   |  |                                                                          | 30,000  |                                                                            |  |                                                                                       |  |                        |         |                      |  | 15.13                                                 |  |                                                               | 3/26/2014  |                                                                                             |  |                                                                                                                                          |  |  |         |  |  |        |  |  |         | 
|                   |  |                                                                          | 50,000  |                                                                            |  |                                                                                       |  |                        |         |                      |  | 6.95                                                  |  |                                                               | 5/12/2015  |                                                                                             |  |                                                                                                                                          |  |  |         |  |  |        |  |  |         | 
|                   |  |                                                                          | 50,000  |                                                                            |  |                                                                                       |  |                        |         |                      |  | 6.97                                                  |  |                                                               | 11/23/2015 |                                                                                             |  |                                                                                                                                          |  |  |         |  |  |        |  |  |         | 
|                   |  |                                                                          | 44,400  |                                                                            |  | 14,800                                                                                |  |                        | 14,800  |                      |  | 8.04                                                  |  |                                                               | 4/3/2016   |                                                                                             |  |                                                                                                                                          |  |  |         |  |  |        |  |  |         | 
|                   |  |                                                                          | 52,500  |                                                                            |  | 17,500                                                                                |  |                        | 17,500  |                      |  | 7.40                                                  |  |                                                               | 5/18/2016  |                                                                                             |  |                                                                                                                                          |  |  |         |  |  |        |  |  |         | 
|                   |  |                                                                          | 50,000  |                                                                            |  | 50,000                                                                                |  |                        | 50,000  |                      |  | 8.59                                                  |  |                                                               | 1/17/2017  |                                                                                             |  |                                                                                                                                          |  |  |         |  |  |        |  |  |         | 
|                   |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 6,000                                                                                                                                    |  |  | 63,180  |  |  | 6,000  |  |  | 63,180  | 
|                   |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 4,000                                                                                                                                    |  |  | 42,120  |  |  | 4,000  |  |  | 42,120  | 
|                   |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 22,330                                                                                                                                   |  |  | 235,135 |  |  | 22,330 |  |  | 235,135 | 
|                   |  |                                                                          |         |                                                                            |  |                                                                                       |  |                        |         |                      |  |                                                       |  |                                                               |            |                                                                                             |  | 6,667                                                                                                                                    |  |  | 70,204  |  |  | 6,667  |  |  | 70,204  | 

---

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Calculated by multiplying
 the number of shares or units by $10.53, the closing price of the Common Stock
 on December 31, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(2) | All of Mr. Buchalters
 equity awards are subject to accelerated vesting upon his resignation from
 the Company, effective February 22, 2010 subject to certain conditions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(3) | Of Mr. Toomans unvested
 option awards, 25,875 options vest on April 3, 2010; 30,675 options vest on
 May 18, 2010; and 150,000 options vest in tranches of 75,000 options on each
 of January 17, 2010 and 2011. Of Mr. Toomans unvested restricted stock and
 restricted stock unit awards, 10,000 shares vest on January 5, 2010, 6,000
 shares vest on May 12, 2010; 4,000 shares vest on November 23, 2010; 39,060
 shares vest in tranches of 16,740 shares on April 3, 2010 and 22,320 shares
 on April 3, 2011; 8,334 shares vest on January 17, 2010; and 36,667 shares
 vest in tranches of 18,333 on January 17, 2010 and 18,334 shares on January
 17, 2011.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(4) | Of Dr. Horaks unvested
 option awards, 30,725 options vest on April 3, 2010; 36,425 options vest on
 May 18, 2010; and 150,000 options vest in tranches of 75,000 options on each
 of January 17, 2010 and 2011. Of Dr. Horaks unvested restricted stock and
 restricted stock unit awards, 20,000 shares vest on September 2, 2010; 3,000
 shares vest on November 23, 2010; 46,340 shares vest in tranches of 19,860
 shares on April 3, 2010 and 26,480 shares on April 3, 2011; 8,334 shares vest
 on January 17, 2010; and 36,667 shares vest in tranches of 18,333 shares on
 January 17, 2010 and 18,334 shares on January 17, 2011.                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(5) | Of Mr. del Campos unvested
 option awards, 19,500 options vest on April 3, 2010; 23,125 options vest on
 May 18, 2010; and 150,000 options vest in tranches of 75,000 options on each
 of January 17, 2010 and 2011. Of Mr. del Campos unvested restricted stock
 and restricted stock unit awards, 6,000 shares vest on May 12, 2010; 4,000
 shares vest on November 23, 2010; 29,400 shares vest in tranches of 12,600
 shares on April 3, 2010 and 16,800 shares on April 3, 2011; 8,334 shares vest
 on January 17, 2010; and 36,667 shares vest in tranches of 18,333 shares on January
 17, 2010 and 18,334 shares on January 17, 2011.                           

15

---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(6) | Of Mr. Davits unvested option awards, 14,800 options vest on April
 3, 2010; 17,500 options vest on May 18, 2010; and 50,000 options vest in
 tranches of 25,000 options on each of January 17, 2010 and 2011. Of Mr.
 Davits unvested restricted stock and restricted unit awards, 6,000 shares
 vest on May 12, 2010; 4,000 shares vest on November 23, 2010; 22,330 shares
 vest in tranches of 9,570 shares on April 3, 2010 and 12,760 shares on April
 3, 2011; and 6,667 shares vest in tranches of 3,333 shares on January 17,
 2010 and 3,334 on January 17, 2011.

Option Exercises and Stock Vested for Fiscal Year Ended
December 31, 2009

The
following table sets forth the information with respect to the Named Executive
Officers concerning option exercises and stock vested on an aggregated basis
for the fiscal year ended December 31, 2009.

|                                                                           |  |                                             |   |                                |  |                                           |  |                                 |  |  |           |  |  | 
|-------------------------------------------------------------------------- |  | ------------------------------------------- | - | ------------------------------ |  | ----------------------------------------- |  | ------------------------------- |  |  | --------- |  |  | 
|OPTION EXERCISES AND STOCK VESTED FOR FISCAL YEAR ENDED
 DECEMBER 31, 2009 | 
|                                                                           | 
|                                                                           |  | Option Awards                               |   | Stock Awards                   | 
|                                                                           |  |                                             |   |                                | 
|Name                                                                       |  | Number of
 Shares Acquired
 on Exercise (#) |   | Value Realizedon
 Exercise ($) |  | Number of Shares
 Acquired on Vesting (#) |  | Value Realizedon Vesting ($)(1) | 
|                                                                           |  |                                             |   |                                |  |                                           |  |                                 |  |  |           |  |  | 
|Jeffrey H. Buchalter                                                       |  |                                             |  |                                |  |                                          |  | 225,429                         |  |  | 1,693,125 |  | 
|Craig A. Tooman                                                            |  |                                             |  |                                |  |                                          |  | 58,406                          |  |  | 373,754   |  | 
|Ivan D. Horak, M.D.                                                        |  |                                             |  |                                |  |                                          |  | 63,776                          |  |  | 427,371   |  | 
|Ralph del Campo                                                            |  |                                             |  |                                |  |                                          |  | 49,766                          |  |  | 325,543   |  | 
|Paul S. Davit                                                              |  |                                             |  |                                |  |                                          |  | 23,403                          |  |  | 159,301   |  | 

|    |                                                                                                                            | 
|--- | -------------------------------------------------------------------------------------------------------------------------- | 
|    |                                                                                                                           
|(1) | Calculated by multiplying
 the number of shares or units by the closing price of the Common Stock on the
 date of vesting.

Nonqualified
Defined Contribution and Other Nonqualified Deferred Compensation Plans

The
following table sets forth the information with respect to the Named Executive
Officers concerning compensation deferred under our Executive Deferred
Compensation Plan for the fiscal year ended December 31, 2009.

|                                                                            |  |                                           |  |                                            |        |                                      |  |                                            |  |                                      |         |  |  |           |  |  | 
|--------------------------------------------------------------------------- |  | ----------------------------------------- |  | ------------------------------------------ | ------ | ------------------------------------ |  | ------------------------------------------ |  | ------------------------------------ | ------- |  |  | --------- |  |  | 
|NONQUALIFIED DEFERRED COMPENSATION FOR FISCAL YEAR ENDED
 DECEMBER 31, 2009 | 
|                                                                            |  |                                           |  |                                            |        |                                      |  |                                            |  |                                      |        
|Name                                                                        |  | Executive
 Contributions
 in Last
 FY ($) |  | Registrant
 Contributions
 in Last
 FY ($) |        | Aggregate
 Earnings
 in Last
 FY ($) |  | Aggregate
 Withdrawals/
 Distributions ($) |  | Aggregate
 Balance
 at Last
 FYE ($) |        
|                                                                            |  |                                           |  |                                            |        |                                      |  |                                            |  |                                      |         | 
|Jeffrey H. Buchalter                                                        |  | 1,216,681                                 |  |                                            | 53,474 |                                      |  | 51,022                                     |  |                                      | 984,248 |  |  | 1,889,745 |  | 
|Craig A. Tooman                                                             |  | 39,600                                    |  |                                            | 19,800 |                                      |  | 7,831                                      |  |                                      | 437,409 |  |  | 78,092    |  | 
|Ivan D. Horak, M.D.                                                         |  | 80,000                                    |  |                                            | 19,101 |                                      |  | 35,037                                     |  |                                      | 149,873 |  |  | 81,074    |  | 
|Ralph del Campo                                                             |  | 29,273                                    |  |                                            | 14,637 |                                      |  | 13,690                                     |  |                                      |        |  |  | 627,432   |  | 
|Paul S. Davit                                                               |  | 139,966                                   |  |                                            | 7,578  |                                      |  | 36,339                                     |  |                                      | 111,868 |  |  | 364,827   |  | 

See
Compensation Discussion and AnalysisExecutive Deferred Compensation Plan for
a discussion of the terms of our Executive Deferred Compensation Plan.

Potential
Payments Upon Termination or Change in Control

The
potential termination and change in control-related payments described below
were calculated in accordance with the terms of the individuals employment
agreements with us described above under Executive Officer Agreements. In
accordance with SEC rules, the amounts below have all been calculated as of
December 31, 2009 using, where applicable, the closing price of Enzon common
stock as of such date.

Jeffrey
H. Buchalter

While
final settlement terms remain under negotiation, Mr. Buchalter may receive
severance payments including certain insurance benefits of up to $3.8 million.
In addition, approximately 281,000 stock options, 67,000 shares of restricted
stock and 225,000 restricted stock units are subject to accelerated vesting as
of his date of resignation, subject to certain conditions.

16

---



Craig
A. Tooman

As
of December 31, 2009, in the absence of a change in control, the total
severance payments that would have been due to Mr. Tooman if his employment
agreement had been terminated without cause or for good reason would have been
$1,241,062, and 206,550 stock options, 46,667 shares of restricted stock and
57,394 restricted stock units, having a value of $2,174,972, $491,404 and
$516,602, respectively, would have become vested.

As
of December 31, 2009, if a change in control were to have occurred and his
employment had been terminated without cause or for good reason as provided in
his employment agreement, the total payments that would have been due to Mr.
Tooman would have been $2,102,765, and 206,550 stock options, 46,667 shares of
restricted stock and 57,394 restricted stock units having a value of
$2,174,972, $491,404 and $516,602 respectively, would have become vested. In
addition, as of December 31, 2009, no additional payments would be made to Mr.
Tooman to make him whole for excise taxes.

Ivan
D. Horak, M.D.

As
of December 31, 2009, in the absence of a change in control, the total
severance payments that would have been due to Dr. Horak if his employment
agreement had been terminated without cause or for good reason would have been
$1,294,477, and 217,150 stock options, 36,667 shares of restricted stock and
77,674 restricted stock units, having a value of $2,286,590, $386,104 and
$817,907, respectively, would have become vested.

As
of December 31, 2009, if a change in control were to have occurred and his
employment had been terminated without cause or for good reason as provided in
his employment agreement, the total payments that would have been due to Dr.
Horak would have been $2,161,247, and 217,150 stock options, 36,667 shares of
restricted stock and 77,674 restricted stock units having a value of
$2,286,590, $386,104 and $817,907, respectively, would have become vested.

Ralph
del Campo

As
of December 31, 2009, if a change in control were to have occurred and his
employment had been terminated without cause or for good reason as provided in
his severance agreement, the total payments that would have been due to Mr. del
Campo would have been $1,615,030, and 192,625 stock options, 36,667 shares of
restricted stock and 47,734 restricted stock units having a value of
$2,028,341, $386,104 and $502,639, respectively, would have become vested.

Paul
S. Davit

As
of December 31, 2009, if a change in control were to have occurred and his
employment had been terminated without cause or for good reason as provided in
his severance agreement, the total payments that would have been due to Mr.
Davit would have been $1,312,534, and 82,300 stock options, 6,667 shares of
restricted stock and 32,330 restricted stock units having a value of $866,619,
$70,204 and $340,435, respectively, would have become vested.

The
Compensation Committee has established a policy providing that the Company
shall not make or enter into any new commitments to make any additional
payments to executive officers to make them whole with respect to taxes
incurred in connection with any change in control, provided, that the Company
intends to comply with the existing employment agreements with Messrs.
Buchalter and Tooman providing for additional payments to be made to make them
whole for excise taxes in connection with a change of control.

17

---



DIRECTORS COMPENSATION

2007 Outside Director Compensation Plan

In
November 2006, the Compensation Committee engaged Mercer to conduct a survey of
directors compensation. The survey looked at the director compensation
practices for the same Compensation Peer Group companies as was used in determining
executive officer compensation and described below in further detail under
Compensation Discussion and Analysis. The results of the survey showed that
both cash and equity compensation for outside directors under the 2004 Outside
Director Compensation Plan was near the 25th percentile. The Compensation
Committee recommended increasing the annual retainer and meeting fees, as well
as equity awards, to be targeted to the 50th percentile.

In
March 2007, the Board adopted a new compensation plan for non-employee
directors effective April 1, 2007. Under the 2007 Outside Director Compensation
Plan, each non-employee director receives an annual grant of stock options on
the first trading day of the calendar year with a Black-Scholes value of $75,000
(the Annual Option Grant) and an annual grant of restricted stock units
settled in shares of Common Stock on the first trading day after June 30 of
each calendar year with a value of $75,000 (the Annual Restricted Stock
Grant). These grants are made under the 2001 Incentive Stock Plan. The number
of options in the Annual Option Grant will be based on its Black-Scholes value
and will be at an exercise price equal to the closing price of our Common Stock
on the date of grant. The Annual Option Grant vests in one tranche on the first
anniversary of the date of grant if the recipient director remains on our board
on that date. Once vested, options granted pursuant to the Annual Option Grant
expire on the 10th anniversary of the date of grant. The number of shares
issued in the Annual Restricted Stock Grant will be equal to $75,000 divided by
the closing price of our Common Stock on the date of grant. The shares covered
by the Annual Restricted Stock Grant vest in three equal tranches on each of
the first three anniversaries of the date of grant if the recipient director
remains on our board on each such date. Upon the election of a new non-employee
director to our board, such newly elected director will receive a grant of
stock options with a Black-Scholes value of $75,000 (the exercise price of
which will be equal to the closing price of our Common Stock on the date of
grant) and a grant of restricted stock units settled in shares of Common Stock
with a value of $75,000 (the number of shares covered by such grant being equal
to $75,000 divided by the closing price of our Common Stock on the date of
grant) (the Welcome Grant). The options and restricted stock units included
in the Welcome Grant vest in three equal tranches on each of the first three
anniversaries of the date of grant, if the recipient director remains on the
Board on each such date. Furthermore, for the Chairperson of our Board, if such
Chairperson is not an employee of the Company, the value of the options and
restricted stock units covered by the Annual Option Grant, Annual Restricted
Stock Grant and Welcome Grant are twice the amounts mentioned above.

In
addition, under the 2007 Outside Director Compensation Plan, each non-employee
director receives an annual cash retainer of $25,000. Non-employee directors
also receive an additional annual cash retainer of $18,000 for service as chair
of the Finance and Audit Committee and $8,000 for service as chair of the
Compensation Committee and $5,000 for service as chair of any other committee.
Non-employee directors receive an additional annual cash retainer of $8,000 for
service as members of the Audit and Finance Committee and an annual cash
retainer of $4,000 for each other committee on which they serve but do not
chair. Further, each non-employee director is entitled to a cash meeting fee of
$2,000 for each meeting of our Board attended in person and $1,000 for each
meeting of our Board attended by teleconference and $1,000 for each committee
meeting attended.

Directors
who are employees of the Company do not receive compensation for their service
on our Board of Directors.

Consulting Agreement

On
June 1, 2009, the Company entered into a consulting agreement with Philip
Renfro, who had served as a director until May 21, 2009, pursuant to which Mr.
Renfro agreed to make himself available to perform consulting services with
respect to the business conducted by the Company and the Company agreed to pay
to Mr. Renfro a consulting fee of $12,500 per month and to reimburse Mr. Renfro
for certain expenses incurred by him in providing the consulting services. The
term of the consulting agreement commenced on June 1, 2009 and terminates on
May 31, 2010, unless earlier terminated either by Mr. Renfro with 30 days prior
written notice or by the Company in the event of a breach by Mr. Renfro of
certain covenants. The consulting

18

---



agreement provides for a
confidentiality covenant that runs through the term of the agreement and for
five years thereafter.

Total Director Compensation

A
summary of compensation paid to each of the Companys directors during fiscal
year ended December 31, 2009 is set forth below. Jeffrey H. Buchalter, who
served as President, Chief Executive Officer and a director of the Company
until February 22, 2010, did not receive compensation for his service on our
Board of Directors.

|                                                               |  |                                   |  |                         |        |                          |  |           |  |  |         |  |  | 
|-------------------------------------------------------------- |  | --------------------------------- |  | ----------------------- | ------ | ------------------------ |  | --------- |  |  | ------- |  |  | 
|DIRECTOR COMPENSATION FOR FISCAL YEAR ENDED DECEMBER 31,
 2009 | 
|                                                               | 
|Name                                                           |  | Fees Earned
 or Paid in
 Cash ($) |  | Stock
 Awards ($)(1)(2) |        | Option
 Awards ($)(1)(3) |  | Total ($) | 
|                                                               |  |                                   |  |                         |        |                          |  |           |  |  |         |  |  | 
|Goran Ando, M.D.(4)                                            |  | 40,098                            |  |                         |       |                          |  | 75,005    |  |  | 115,103 |  | 
|Rolf A. Classon                                                |  | 79,451                            |  |                         |       |                          |  | 75,005    |  |  | 154,456 |  | 
|Alexander J. Denner(5)                                         |  | 36,766                            |  |                         | 75,006 |                          |  | 74,998    |  |  | 186,770 |  | 
|John Geltosky(6)                                               |  | 19,753                            |  |                         |       |                          |  | 75,005    |  |  | 94,758  |  | 
|Robert LeBuhn                                                  |  | 79,000                            |  |                         |       |                          |  | 75,005    |  |  | 154,005 |  | 
|Harold J. Levy(7)                                              |  |                                  |  |                         |       |                          |  |          |  |  |        |  | 
|Victor P. Micati                                               |  | 76,000                            |  |                         |       |                          |  | 75,005    |  |  | 151,005 |  | 
|Richard C. Mulligan(5)                                         |  | 37,766                            |  |                         | 75,006 |                          |  | 74,998    |  |  | 187,770 |  | 
|Phillip Renfro(6)                                              |  | 28,434                            |  |                         |       |                          |  | 75,005    |  |  | 103,439 |  | 
|Robert C. Salisbury                                            |  | 89,000                            |  |                         |       |                          |  | 75,005    |  |  | 164,005 |  | 

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(1) | Dollar
 value of stock awards and option awards shown in this table is the aggregate
 grant date fair value of such awards calculated in accordance with FASB ASC
 Topic 718. Assumptions used in the calculations are included in Companys
 audited financial statements for the year ended December 31, 2009 included in
 the Companys Annual Report on Form 10-K for the year ended December 31,
 2009.                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(2) | As
 of December 31, 2009, each of the directors listed above (other than Dr.
 Ando, Dr. Geltosky and Mr. Renfro, who were not serving as directors at the
 end of 2009) held the following aggregate number of outstanding unvested
 shares of restricted Common Stock and restricted stock units: Mr. Classon:
 10,118; Dr. Denner: 10,432; Mr. LeBuhn: 10,118; Mr. Levy: 0; Mr. Micati:
 10,118; Professor Mulligan: 10,432; and Mr. Salisbury: 10,118.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(3) | As
 of December 31, 2009, each of the directors listed above (other than Dr.
 Ando, Dr. Geltosky and Mr. Renfro, who were not serving as directors at the
 end of 2009) held the following number of outstanding options: Mr. Classon:
 139,680; Dr. Denner: 25,889; Mr. LeBuhn: 129,680; Mr. Levy: 0; Mr. Micati:
 119,680; Professor Mulligan: 25,889; and Mr. Salisbury: 104,680.                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(4) | Dr. Ando resigned from the
 Board on August 3, 2009.                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(5) | Dr.
 Denner and Professor Mulligan were elected as directors at the 2009 Annual
 Meeting of Stockholders on May 21, 2009.                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(6) | Dr.
 Geltosky and Mr. Renfro did not stand for re-election as directors at the
 2009 Annual Meeting of Stockholders, and their service on the Board ended on
 May 21, 2009.                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(7) | Mr.
 Levy was appointed as a director on July 23, 2009. Mr. Levy has waived all
 cash and equity compensation to which he is entitled in connection with his
 service on the Board.                                                                                                                                                                                                                                                                      

In
March 2009, after consideration of current market conditions and the weak
performance of the Companys stock in 2008, and the determination not to grant
any equity awards to executive officers in connection with annual performance
reviews at the end of fiscal year 2008, the Governance and Nominating Committee
recommended, and the Board of Directors approved, an amendment to the 2007
Outside Directors Plan to provide that there shall be no Annual Restricted Stock
Grant for any directors for calendar year 2009.

Directors Stock Ownership Program

The
directors stock ownership program requires each of the outside directors to
own and maintain shares of our Common Stock with a market value of five times
their annual cash board retainer within five years after

19

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the
director first joins the Board. Currently, the minimum market value requirement
is $125,000, representing five times the $25,000 annual cash board retainer.
The determination of whether the shares owned by a director meet the current
$125,000 minimum market value requirement will be based on the higher of the
highest average trading price of our Common Stock over any consecutive twenty
trading days (after the director acquires the applicable shares), or the price
paid for the Common Stock by the director. For the purposes of these guidelines
the following will be counted in determining stock ownership: (1) shares
purchased on the open market, (2) shares owned jointly with or separately by
spouse and/or children, (3) shares obtained through stock option exercise, (4)
restricted stock or restricted stock units, and (5) vested and in the money
unexercised options, provided that the shares underlying such options may not
exceed 50% of the requirement total. The Board may waive this requirement under
certain circumstances.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION

Our
Compensation Committee currently consists of Mr. Classon (Chairman), Dr. Denner
and Messrs. Levy and Micati. Each member of the Compensation Committee is
independent as defined by NASDAQ listing standards. No member of our
Compensation Committee was an officer or employee of the Company during the
last fiscal year, was formerly an officer of the Company, or had any relationship
requiring disclosure by us under Item 404 of Regulation S-K under the Exchange
Act.

During
the last fiscal year, none of our executive officers served as a member of the
compensation committee (or other board committee performing equivalent
functions or, in the absence of any such committee, the entire Board of
Directors) of another entity, one of whose executive officers served on our
Compensation Committee or on our Board of Directors, and none of our executive
officers served as a director of another entity, one of whose executive
officers served on our Compensation Committee.

REPORT OF THE COMPENSATION COMMITTEE

The
Compensation Committee has reviewed and discussed the Compensation Discussion
and Analysis required by Item 402(b) of Regulation S-K under the Exchange Act
with management, and based on these reviews and discussions, the Compensation
Committee recommended to the Companys Board of Directors that the Compensation
Discussion and Analysis be included in the Companys Form 10-K/A for the fiscal
year ended December 31, 2009.

| |                            
| | ---------------------------
| | THE
 COMPENSATION COMMITTEE
| | Rolf A. Classon, Chairman  
| | Alexander J. Denner        
| | Harold J. Levy             
| | Victor P.
 Micati          

20

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PART IV

Item 15. Exhibits
and Financial Statement Schedules

(a)(1) and
(2) The information required by this item is incorporated herein by reference
to the financial statements and notes thereto listed in Item 8 of Part II of
the 10-K Report.

(a)(3) All
exhibits filed in the 10-K Report are incorporated herein by reference. The
following exhibits are filed as a part of this report:

|             |  |                                                                                                          |  |                                                | 
|------------ |  | -------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------- | 
|Exhibit
 No. |  | Item Title                                                                                               |  | Filed
 Herewith or 
 Incorporated by Reference
|             |  |                                                                                                          |  |                                                | 
|23.0         |  | Consent of
 Independent Registered Public Accounting Firm                                                |  |                                              
|             |  |                                                                                                          |  |                                               
|31.1         |  | Certification
 of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
 Act of 2002 |  |                                              
|             |  |                                                                                                          |  |                                               
|31.2         |  | Certification
 of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
 Act of 2002 |  |                                              

|  |                 | 
|- | --------------- | 
|  |                
|  |                
| | Filed
 herewith

21

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SIGNATURE

Pursuant to
the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

|                      |                             |                                                         
|--------------------- | --------------------------- | --------------------------------------------------------
|                      | ENZON PHARMACEUTICALS, INC.
|                      |                            
|                      | (Registrant)               
|                      |                             |                                                         
|Dated: June
 30, 2010 | By:                         | /s/ Ralph
 del Campo                                    
|                      |                             |                                                         
|                      |                             | Ralph del
 Campo                                        
|                      |                             | Chief
 Operating Officer and Principal Executive Officer
|                      |                             | (Principal
 Executive Officer)                          

22

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